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NYU felt it was critical to have a dedicated BPCI team and hired a senior administrator to direct the initiative. It spent a year preparing for BPCI, guided by a steering committee of senior management and clinical leaders. Before starting the risk phase of the program, it created a new network integration department with five full-time equivalent (FTE) Nurse Care Coordinators (NCC) dedicated to managing BPCI patients. Data analytics was a critical component of NYU’s preparations. Because hospitals do not know most patients’ Medicare DRG assignment until after they are discharged, NYU created a clinical algorithm to identify likely BPCI patients during pre-admission screening and programmed the tool directly into its electronic medical record. It created a BPCI patient registry so NCCs could begin working with patients during the pre-admission period. It created a risk stratification tool to identify which patients were good candidates for home care and a process to ensure that staff created consistent expectations about where patients were likely to go for post-acute care. Finally, it developed clinical dashboards with key BPCI metrics like discharge disposition and readmissions that it shared weekly with physicians. NYU faced several challenges of particular importance to tertiary care hospitals. As new technologies and treatment techniques come into practice, BPCI’s approach for using historical data to set target prices for future periods can lead to pricing distortions. For posterior spinal fusion, for example, NYU began to see substantially more patients where surgeons were fusing six to eight vertebra rather than two or three. These are more complicated surgeries with higher hardware costs, and longer operating and recovery room times. These extra costs are not reflected in BPCI pricing since there is no change in DRG classification or risk adjustment. But they have resulted in higher-cost outlier payments relative to what NYU experienced in the baseline and led to financial losses.
11Also, advancement in minimally invasive medical technology allowed anterior and posterior fusion of the spine to be performed via a single incision. This changed the classification of the procedures from an anterior posterior fusion DRG to a posterior fusion DRG, which lowered reimbursement by at least $20,000 and also increased the outlier payments related to the baseline. NYU dropped out of spine bundles in January 2015 because the baseline target prices were inconsistent with current clinical practice. NYU had similar concerns about transcatheter aortic valve replacements (TAVR), but these were allayed when CMS introduced new DRGs for TAVR in October 2014.NYU had several additional concerns. One was the loss of indirect and direct medical education payments as it reduced readmissions for BPCI patients. Another was the loss of inpatient rehabilitation facility revenue as it worked to care for more patients in their homes. A third was the lack